Friday, 27 January 2012

Homo Economicus



I was reading The Value of Nothing: Why Everything Costs So Much More Than We Think by Raj Patel and it gave me some stuff to think about.

All my life I’ve heard about the “tragedy of the commons” and how if you have a common resource, everyone takes advantage and no one feels responsible and the resource ends up being destroyed.  However, Patel points out that historically, the commons actually lasted almost three hundred years from their establishment in 1215 with the Charter of the Forest (a document signed with the Magna Carta).  It  granted the peasants the right to use pasture for their animals, till land, collect wood, harvest honey, use medicinal plants, forage, etc, with local resources.  The system worked, more or less, until the enclosures began in the 1500s and the land began to be privatized for the use of the nobles and royalty.  The peasants were kicked off and had to shift to selling their labour since they no longer had rights to the land.

Patel suggests the land wasn’t actually destroyed until it was privatized by an absent landlord.  The locals no longer had any benefit from the land and thus no reason to protect it.  The owner wanted to wring maximum profit and didn’t have to deal with the local impact.

He also points out that in social experiments, people do not consistently act in a selfish manner.  They act with a mix of selfishness and generosity.  It is only when people are removed from accountability and impact that they act completely selfishly, i.e., when they become part of a corporation.  The corporation wants to wring maximum profit from its holdings and no individual has to be accountable.

It’s an interesting point and one that makes sense to me.  People take care of their homes and their families, we’re hard-wired to be careful with those we care about and in our immediate kin-circle.  But we also have an astonishingly efficient ability to dismiss those outside that circle as unimportant and not care about the impact we have on them.  If we don’t have to see it, we’re okay with surprisingly inhumane situations.

I’m not sure his proposed solution would work.  Patel proposes shifting to a small, local based economy where local individuals are required to participate in government.  He sees big government as the equivalent of another corporation.  However, I think big government is absolutely necessary to prevent the kind of difficulty we’re currently in.  Regulation and protection is necessary to prevent people sloughing off their problems onto other groups.

Patel also supports switching to organic farming.  Now, I agree that the modern industrial agriculture model is incredibly wasteful and destructive but there’s a problem with organic farming: lower crop yields.  The figures I’ve seen say organic fields yield between 60% and 70% of modern fields.  That’s going to be a problem.  You can’t achieve world peace when people are hungry.  They will fight for survival.

I do agree that changes have to be made but I see a huge problem.  In order to achieve global equity, the West will have to accept a drop in their standard of living.  That doesn’t seem likely to happen.

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